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Investing in watches, anyone?

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ernesto50

New Contributor
Oct 12, 2014
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Hi there!

Long time lurker/reader, irregular poster here.

As the markets go crazier every day, a lot of people have been looking into ways to either

1. diversify their portfolios
or
2. make gains in different markets

As a watch fan I believe the watch market can tick both boxes and give you an additional big factor, which is fun!

If you have no idea what I'm talking about, let me give you an example:

This is a Rolex GMT Master II, also called "Pepsi" (due to the bezel)

Screenshot 2020-11-23 at 18.08.53.png

If you go to a Rolex store near you and try to buy it, you will have to pay between 8k and 10k (depending on your country and currency, but usually around 10k USD). Now I knowingly wrote "try" because the chances of you going into that Rolex store and getting this watch immediately are close to zero.

Why? There are multiple factors and I'd love to dive in, in other separate posts, but essentially it is said that Rolex is knowingly keeping the stainless steel sports watch models in smaller numbers and the Authorized Dealers (ADs) are only selling to those customers who are 1. on a waitlist or 2. good enough customers because they spend $xx,xxxx every year with the store.

That creates a grey market of watches, meaning a lot of people wanting to buy this type of watch, not a lot of supply at the normal markets, so you go to watch dealers and grey market dealers and pay a premium of walking out with that watch right now.

How high is that premium? For this watch - double. Meaning you pay between 18 and 20k USD to get this Rolex Pepsi today.

So if you are lucky, have connections or know which models fetch (or ideally WILL fetch) a premium, you can make some nice money while at the same time wearing a beautiful watch.

Another example here:

This is the Rolex Submariner 116610LV, also known as the "Hulk" for its bulkier appearance and the green bezel + green dial

Screenshot 2020-11-23 at 18.15.44.png

Before 31st August 2020 this was trading between 12k and 14k USD, still a premium of 4-6k USD mind you, but it was a normal "Rolex" premium you would have to pay anyway. Then, at the end of August/beginning of September, Rolex introduced a new, similar watch:

Screenshot 2020-11-23 at 18.17.33.png

This is the Rolex Submariner 122610LV or the Cermit aka the Ceramic Kermit (again, don't get stuck up on the names, I'll teach you those with time). This is currently sold for around 10k USD at retail, but because it cause the Hulk to discontinue, the Hulk price immediately jumped from 12-14k USD to 18k-20k USD overnight.

Nowadays you cannot find it below those prices anymore.

These are not overly special models with special complications (read: watch functions) or precious metals being used, these are your very normal typical stainless steels sports model watches from Rolex that you were able to easily buy at the store a couple of years ago.

As I run watchnewsletter.com and come across a lot of interesting watch deals, I wanted to ask you whether you'd be interested in a weekly in-depth post of a watch model/brand that I think is undervalued in which you can either invest (and hold it) or buy and wear it to ideally sell it with a profit afterwards.

Let me know, as I have plenty of examples like the ones above, also with different brands, but I believe Rolex single-handedly created this market so it's only fair that we start with them :)
 

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Tom H.

Bronze Contributor
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Clicked through to your website and in your header photo are two watches I've already worn today, the Casio World Time I wore surfing this morning and the Speedmaster, which I'm wearing right now... on a NATO flag strap, but I literally had it on that same black leather NATO as in your photo for the past several weeks.

Glad to know my watches choices are completely unoriginal and pedestrian :happy:

As far as investing in watches, it doesn't seem at all Fastlane to me. You have very little control, it's not scalable, and overall I think it'd be a major pain in the a$$. I guess it's fine as a hobby.

I will say that when the lockdowns started and massive QE started taking off, one of my first thoughts was, "well at least my watch will retain it's value". Not that I have any plans to sell my watch, but I figure if my dollars become worthless, my watch is still worth around 1-2 ounces of gold, as long as there's a market.
 

ernesto50

New Contributor
Oct 12, 2014
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18
17
35
Clicked through to your website and in your header photo are two watches I've already worn today, the Casio World Time I wore surfing this morning and the Speedmaster, which I'm wearing right now... on a NATO flag strap, but I literally had it on that same black leather NATO as in your photo for the past several weeks.
Excellent choices! :)

Glad to know my watches choices are completely unoriginal and pedestrian :happy:

As far as investing in watches, it doesn't seem at all Fastlane to me. You have very little control, it's not scalable, and overall I think it'd be a major pain in the a$$. I guess it's fine as a hobby.
No, I also don't think watches as investments is fastlane at all. But most investments aren't, yet we still do it. I believe the Fastlane part has to be a business or something you have ownership in. That being said making 100% on a watch after buying is still a good deal :)

I will say that when the lockdowns started and massive QE started taking off, one of my first thoughts was, "well at least my watch will retain it's value". Not that I have any plans to sell my watch, but I figure if my dollars become worthless, my watch is still worth around 1-2 ounces of gold, as long as there's a market.
I agree, I was actually surprised to see that the values didn't drop as much as I expected!
 

Tom H.

Bronze Contributor
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Dec 13, 2019
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Jaco, Costa Rica
I think beanie babies are a great investment. Actually I believe there are beanie baby index funds ...
LOL, no really fair to compare watches to Beanie Babies. Watches are more like cars or art... they can be a legitimate store of value if you know what you're doing, and like OP said, if you pick the right one they can multiply in value.
 

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